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Pepsi (PEP) vs. Coke (KO): Which Ruled 3Q?

NEW YORK ( TheStreet) -- PepsiCo reported third-quarter earnings before the bell on Wednesday, while Coca-Cola reported a day earlier -- how do the soda giants compare?

PepsiCo reported third-quarter net income of $1.91 billion, or $1.23 a share, compared to $1.9 billion, or $1.21 a share, in the year-ago quarter. Revenue came in at $16.91 billion, missing expectations by $120 million. The company noted a 1.5% revenue decline at its Americas Beverages unit, a result of a 4% drop in volume, though revenue increased 7% in its Americas Foods arm.

"Our year-to-date results give us confidence in achieving our 2013 financial goals and we continue to believe that we have the right strategies in place to create long-term value for our shareholders," she said in a statement.

Coca-Cola, meanwhile, reported a 6% increase in net income to $2.45 billion, or 54 cents a share, compared to $2.31 billion, or 50 cents a share, a year earlier. Revenue came in at $12.03 billion, a 3% year-on-year decrease. Coca-Cola saw 2% growth in global volume in the third quarter and by region, 4% growth in Eurasia and Africa, 2% in North America and 5% in the Pacific.

CEO Muhtar Kent said the company delivered a record number of servings during the quarter for the Coca-Cola brand and across the entire portfolio.

"In all, we delivered 181 billion servings thanks to global volume growth of 2% driven by 2% global growth in brand Coca-Cola," he said in a conference call.

Both companies, however, expect to see continued sluggish growth in soda consumption. According to a Credit Suisse Research Institute report, as public awareness of its dangers increase, companies shilling high-sugar content products will suffer in the same way tobacco companies did.

"For companies with brands as strong as Coca-Cola or Pepsi, the biggest risk to sales growth and profitability is a negative public image," the report says.

Both Coca-Cola and Pepsi have introduced low-calorie and sugar-free options to diversify their beverage portfolio to hedge against the shift in consumer behavior.

During Coca-Cola's third-quarter conference call, for instance, Coca-Cola Americas President Steve Cahillane noted Coke Zero volume grew 5% in the quarter, while Diet Coke kept its spot as the second best-selling sparkling beverage in the U.S.

Nooyi said Pepsi is also focusing on the development and production of healthier beverage options.

"The diet slowdown has been a little more rapid than we expected," she said during a conference call. Due to PepsiCo's diverse brand portfolio, which includes snack companies Frito-Lay and Tropicana, Nooyi believes the company is well-insulated against any fundamental shifts in consumer behavior.

PepsiCo shares gained 2.1% to $82.27 and Coca-Cola was up 0.9% to $38 by market close. In the year to date, PepsiCo shares are up 20.2%, in line with the S&P 500's 20.7% gain, while Coca-Cola has climbed only 4.8%.